Friday, January 19, 2018
Business

Monoprice takes on Amazon in trade of cheap electronics

A company in Rancho Cucamonga, Calif., represents a nightmare for the retail electronics industry. Located there is the 173,000-square-foot distribution facility and headquarters of Monoprice, an online store which aims to thrive by selling the electronic esoterica that carry a hefty markup at brick-and-mortar retailers.

For instance, you can get an HDMI cord — the critical component everyone needs to connect modern TVs to a set-top box — for $3.61. A similar cord from Best Buy or RadioShack is about $20.

But it's online where Monoprice.com has made a name since 2002, largely by word of mouth among tech-savvy geeks.

Last year, Monoprice grew to $145 million in gross sales. Monoprice goes direct to Asia in search of factories that can make products that stand up against leading store brands. Its goal is to find categories where it can undercut major retail prices by 30 to 70 percent.

Think Amazon, but much smaller, and only selling its own products.

"We're just cutting off all the margins," said Monoprice CEO Ajay Kumar.

The company has received praise from tech sites CNET and Gizmodo in head-to-head tests that showed its cables performing on par with far more expensive brand names available at retail stores.

Monoprice sees its advantage in selling a limited set of options for a specific kind of product it has tested itself, rather than selling everything as does Amazon or a site like TigerDirect.com.

While Amazon offers its own brand of low-cost electronics accessories, called Amazon Basics, with prices in the same ballpark as Monoprice, the Seattle tech giant also sells higher-priced cables, such as $35 Monster-branded HDMI cables.

"Amazon is trying to sell more Monster cables than Amazon Basic cables," said Wedbush Securities analyst Gil Luria. "Other direct-to-China websites don't curate their products. They also don't have the same level of service."

Recently, Kumar has begun pushing his 270-person company into new categories, such as musical instruments and power-efficient LED lights. The company sells Monoprice-branded electric guitars for $91.07 and a flute for $106.03. A simple plastic iPhone or Android case — the kind available pretty much everywhere for between $10 and $50 — sells for less than $4.

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